Years of mobilization around the movement to legalize marijuana in Michigan bore fruit in 2018. Now, Tami VandenBerg, a board member of the organization that helped bring the legalization initiative to voters, predicts the ways the ‘green rush’ will start to reshape the region’s economy.

Years of mobilization around the movement to legalize marijuana in Michigan bore fruit in 2018. Now, Tami VandenBerg, a board member of the organization that helped bring the legalization initiative to voters, predicts the ways the ‘green rush’ will start to reshape the region’s economy.

Now that recreational marijuana is legal in Michigan, what’s coming in 2019?

It is going to be a fascinating year. Many moving parts. Many moving policies. We finally have a little bit of clarity, in terms of what Grand Rapids is going to allow. They will begin taking applications for some medical businesses in January and some in March. That’s going to be a big deal. We’re going to see, for the first time this century, legal businesses with cannabis in Grand Rapids. There are a lot of people from out of town coming in, which is great, and also more competition for the locals. The zoning is still extremely limited in terms of where you can open. That’s driving up the cost of getting into the business. The mayor and city commission and the community wanted to see a lot of locals be able to get into the marijuana business. With the current zoning, they may have done the opposite. They may have restricted it to a point where you’re going to need to have pretty large sums of cash to even apply for a license.

Because of the cost of the property?

Yes. The zoning is so small. It’s very basic supply and demand. I understand they want limited licenses, but when you have the zoning so restricted, the price is going to go three times what it would have been. It’s giving a very serious advantage to people who have liquid cash, who don’t need to get any kind of financing or to locate investors. I was talking to a gentleman who actually has a building randomly in the zone. He said it’s like hitting the lottery. His building just tripled in value overnight. Lucky him, right?

Does he want to get into the weed business?

He has a functioning business there that is doing well. He’s probably going to move that. I will say I’m glad we’re starting somewhere. They’re allowing licenses. That’s what we fought for. That’s what we wanted. We wanted more access. We will fight for that. At the end of the day, it’s about business. It’s also about access for patients.

In addition to raising capital, what can people who are interested do to get in at the ground floor of this industry?

We’re forming a guild, West Michigan Cannabis Guild, for anyone in the business or looking to get into the business or ancillary businesses. You have people that are going to open up provisioning centers and grow facilities. Then you have the marketing people. You have Growco and your greenhouse people. This is not just going to benefit people directly in the business. There are all kinds of ancillary businesses that are already popping up — websites, tech. There are people working on apps for what strain works for what condition. It really is the ‘green rush.’ I don’t know how much people realize this. This is a once in a lifetime thing. It’s like the tech boom. It’s like ending alcohol prohibition. There are only so many times in your life where you’re going to see this giant new industry take root.

Both the governor-elect and the incoming attorney general were favorable toward legalizing marijuana. Does that make a difference in the process?

Yes, especially the governor. I think that’s going to help a lot. The state has a year to put together all of the rules. One of the reasons that medical marijuana facilities have been such a mess, in terms of getting licenses and the backlog and so many people getting denied, is there’s the medical marijuana board that has to approve every single application. That’s been a group that’s appointed by the governor. That group has not been terribly friendly to anybody who was in the business before it was legal. Our hope is that we’re going to see this whole process go much more smoothly.

Is there anything that people aren’t paying attention to that could happen next year and make a big difference in the industry?

I see in 2019, every city or county individual who’s up for election is going to be forced to talk about cannabis in the state of Michigan. In Grand Rapids, we’ve got a mayor that’s up for re-election. I don’t know who all is going to jump in that race. Three city commission seats. We’re going to be right there. We’re going to be talking to every single one of them. We also want to keep an eye on how many people are moving into town for this or moving into the state for this. Michigan has been losing population for many years. This going to start bringing people back, which is great, except that’s going to drive up costs.

Grand Rapids has been gaining people already.

I think Grand Rapids is one of the only cities that’s been gaining. That’s going to be another interesting piece. People are worried about housing prices. They have been very high. Most states that have legalized have seen about a 7 percent increase in property values. Is the city going to be able to use some of the tax money they get in to help with the housing stuff? How strategic are they going to be? How in front of this are they going to be? That’s the stuff I’m going to be watching. That’s the stuff I’m going to be involved with.

Proponents of statewide and local ballot initiatives went four-for-four on election night, establishing a new process for drawing legislative districts, increasing access to voting and dedicating funding for early childhood development in Kent County.

Proponents of statewide and local ballot initiatives went four-for-four on election night, establishing a new process for drawing legislative districts, increasing access to voting and dedicating funding for early childhood development in Kent County.

But perhaps the most significant measure affecting the business community is voters’ decision to legalize recreational marijuana for adults.

Supporters say the historic move is a policy sea change on an issue that’s gaining public acceptance, and — as the first state in the Midwest to do so — will pave the way for others in the region.

“It’s an incredible opportunity to really open up the door in the Midwest,” said MILegalize board member Tami VandenBerg. “Our hope is this could be a catalyst. It’s nice to get in front with this.”

The law goes into effect 10 days after the votes are certified by the Board of State Canvassers, which takes about three weeks. After that, residents over the age of 21 can possess up to 2.5 ounces of marijuana in public and 10 ounces at home, and grow up to 12 plants. The law allows the state up to two years to adopt rules around growing, distribution and retail sales, similar to what’s in place for medical marijuana.

Also similar to medical marijuana, the law allows municipalities to opt out of the program and reject marijuana businesses.

Among the unanswered questions moving forward, business groups say employers are still struggling to understand what this means for drug-free workplaces and attracting qualified talent. The Grand Rapids Area Chamber of Commerce is hosting an event this month with The Right Place Inc. and Talent 2025 Inc. exploring marijuana’s effects on employment.

“We understand this will be a journey for us, our members, the community and the state,” said Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Chamber. “The biggest thing we’re encouraging members to do is remind employees about their drug policies.”

Under the law, employers are still allowed to maintain drug-free work policies and testing, but they have been concerned about finding enough drug-free applicants to fill talent shortages.

“There’s no link between legalization policies and state economies suffering. To say employers won’t find talented people — that hasn’t been the case in other states that have legalized,” he said. “There are a lot of people out there looking for jobs. If they know using marijuana could jeopardize their opportunity, I think they’ll act accordingly.”

Schweich points out that Michigan is now the second-most populous state to legalize recreational marijuana and “maintains the momentum of the marijuana reform movement. This is an important victory. I expect other Midwest states will follow suit.”

In her first press conference as governor-elect, Democrat Gretchen Whitmer said she also would explore the possibility of expunging records of some people with previous marijuana charges. This is also a priority for advocates but wasn’t included in the proposal language.

Johnston said the GR Chamber hasn’t taken a position on expunging records related to marijuana charges.

“That would need a detailed review,” Johnston said. “We have very much been supporters of criminal justice reform, understanding a vast majority of people who go into the corrections system come back to society.”

Meanwhile, legalization opponents have vowed to “explore all options” to challenge the law either through courts or the Legislature.

“We’re optimistic to be able to work with communities, organizations and individuals who want to minimize the impact of legalized recreational marijuana in Michigan,” said Scott Greenlee, president of the opposition group Healthy and Productive Michigan. “We’re exploring all of our options from a legal, policy and practicality standpoint.”

Still, supporters said the election of Whitmer and Dana Nessel for attorney general — both Democrats — boosts their hopes of a smooth transition.

“We would be looking at a very different situation. Bill Schuette has been absolutely terrible on medical marijuana,” VandenBerg said. “The fact that we got Prop 1 passed is big. That we got candidates in really key positions who endorsed Prop 1 is an even bigger win.”

Gerrymandering and voting rights

By an even wider margin — 61 percent to 39 percent — voters approved a constitutional amendment that creates a bipartisan redistricting commission to draw new legislative and congressional districts.

Proposal 2 started as a grassroots effort by Caledonia resident Katie Fahey in the days after the 2016 presidential election. In a fairly benign Facebook post at the time, Fahey wrote: “I’d like to take on gerrymandering in Michigan, if you’re interested in doing this as well, please let me know.”

Over the course of nearly two years, the Prop 2 campaign brought in thousands of volunteer supporters and millions of dollars in spending, including from outside groups near the end.

“Democracy does not work if we, the people, sit at home and let politicians take advantage of their power. We must show up to make our voices heard and our votes count,” Fahey said in a statement Wednesday.

However, state and local business groups opposed the measure and challenged it in court, saying it was a convoluted and lengthy change to the state’s constitution. Opponents also have raised concerns about the selection of commissioners, the pace of the process and costs.

Johnston said the GR Chamber remains concerned about how maintaining municipal boundaries will be addressed, how “communities of interest” around gerrymandering are defined and who is selected for the redistricting commission.

“It’s going to be interesting for our state; it’s important we do our best to get it right,” he said.

The third statewide ballot proposal passed by the widest margin, 67 percent to 33 percent, according to unofficial results.

Under the recommendations offered by the Planning Commission, dispensaries would be allowed to operate in the city’s traditional business districts. The body also would allow more industrial uses tied to the marijuana industry — including growing operations, transportation companies and marijuana testing labs — within certain areas of the city.

All recommendations still need to be reviewed and approved by the Grand Rapids City Commission, which would also include a public hearing.

To Suzanne Schulz, the city’s managing director of design and development, Thursday’s hearing was one of the first steps toward welcoming an industry that state and local governments are increasingly embracing, even while marijuana remains illegal under federal law.

“This is one step toward allowing for other types of uses other than just a caregiver within the city of Grand Rapids,” Schulz said. “I would not say it’s the end of the story. This is continually emerging.”

Members of the Planning Commission took objection to many of the ordinances as written, specifically some proposed buffers related to how far marijuana-related businesses could operate from residential areas and from one another.

Members of the body also opposed a proposed $5,000 license fee — the proceeds of which would go toward enforcement. Those fees were ultimately dropped from the Planning Commission’s recommendations.

“$5,000 to train police to potentially arrest more people who are legally medicating seems counter-intuitive to the whole (decriminalization) movement, to the whole bringing the black market to light and so forth,” said Planning Commissioner Darrel Ross, referring to the decision by Grand Rapids voters to decriminalize marijuana in 2013.

“It seems like Grand Rapids is putting an unnecessary burden from a fee standpoint,” Ross said. “It goes back to the same narrative of crime and everything is going to get worse, which we have absolutely no evidence of.”

Dispensaries would still be kept 1,000 feet from schools, child care centers and parks. Recommendations that would have kept medical marijuana businesses 1,000 feet from the borders of surrounding municipalities — which remain opposed to the marijuana industry, Schulz said — also were dropped from the proposed ordinance.

The Planning Commission also dropped a measure that would have set a cap of 39 licenses for medical marijuana businesses.

Schultz told MiBiz following the meeting that the city would work on more models to determine the appropriate number of licenses.

Many advocates who spoke during the public comment portion of the Planning Commission meeting wanted the city to increase the number of available licenses.

Tami VandenBerg, an owner of two Grand Rapids bars, noted the limited number of licenses likely would result in the exclusion of minorities from launching new marijuana-related businesses.

“We have an incredible opportunity as a city here,” Vandenberg said during the public comment session.

VandenBerg is also a board member of MiLegalize, an organization working to legalize adult recreational use of marijuana in the state. That could happen as soon as this fall.

“It’s rare that a city has an opportunity to bring in so much business and so many jobs and so many opportunities for entrepreneurs,” VandenBerg said. “We’ve talked about this as a city, we care about equity, we care about our neighborhoods. We care about small business. If we really cared about those things, we’d be working very hard to make sure as many people as possible can access this opportunity.”

Backers of a marijuana legalization ballot initiative in Michigan say they have the financial and grassroots support necessary to put the question before voters in 2018.

Backers of a marijuana legalization ballot initiative in Michigan say they have the financial and grassroots support necessary to put the question before voters in 2018.

An unsuccessful attempt in 2016 gathered roughly 350,000 signatures but did so outside of the required 180-day timeframe. MILegalize, the group behind the 2016 effort, is now working with the Washington, D.C.-based Marijuana Policy Project as part of a new group, the Coalition to Regulate Marijuana Like Alcohol. They’re hoping to raise millions of dollars to pay signature-gatherers this time around and for what could be an expensive campaign leading up to the 2018 General Election, should the signatures get collected.

The coalition’s political director is Jeff Irwin, a former Democratic state representative from Ann Arbor who worked closely on marijuana issues while in the Legislature.

“I thought this was an important reform to make when I was in office, and it’s one I’m proud to be advancing,” Irwin said.

The group is roughly a month into its 180-day campaign to get 252,523 signatures from registered voters. Its first campaign finance reports are due in July, which will offer a glimpse into the early fundraising efforts of the coalition.

If the signatures are gathered, “the longer, second phase of the campaign is where there is going to be a lot more persuasion involved,” Irwin said of opposition likely coming from public health and law enforcement groups.

“One thing I’ve seen is that the public is way ahead of politicians on this issue,” he said. “Our focus now is on securing ballot access. Then we can have a nice, long, detailed conversation about why (legalization) is better.”

Specifically, the initiative would allow for the personal possession, cultivation and use of marijuana for those age 21 and older — as well as the cultivation of industrial hemp — setting up different classes of growers based on the number of plants. It also creates a licensing system for growing, processing, testing, transporting and selling marijuana similar to a process that’s coming for the medical cannabis sector in Michigan.

Residents would be able to purchase up to 2.5 ounces at a time, although individuals would be able to keep up to 10 ounces in their homes.

Retail sales of cannabis would come with a 10-percent excise tax in addition to the state’s 6-percent sales tax. A “marihuana regulation fund” would be created within the state treasury for collecting tax revenue and fees. Revenues would be distributed to municipalities (15 percent) and counties (15 percent) that allow retail stores or “microbusinesses,” the school aid fund (35 percent) for K-12 education, and the Michigan transportation fund (35 percent) for road repairs and maintenance. Estimated tax revenues could be between $100 million and $200 million, according to the coalition.

The system essentially will be separate from the state’s medical marijuana regulatory structure for commercial entities, Irwin said.

The effort reportedly has the support of the ACLU of Michigan, the National Patients Rights Association and other drug policy reform groups.

Business potential

Irwin says the tax revenue from the plan is “really a tiny piece of the pie” of the total revenue that could be generated for new businesses.

“We’re talking about billions of dollars in sales,” Irwin said.

Figures from the Marijuana Policy Project show Colorado and Washington collected nearly $200 million and $255 million, respectively, from tax revenue off of marijuana sales in 2016. The group also reports that the legal marijuana industry generated $2.4 billion in overall economic activity in Colorado in 2015.

“That’s a lot of ringing of cash registers,” Irwin said of Colorado. “Michigan as a tourism state is positioned to do even better from the economic benefits of going this route. States that have legalized have seen a profound effect on real estate prices, vacancy rates and unemployment.”

Irwin said the goal was to set the excise tax lower than what Colorado started with, although it wouldn’t be the lowest among the eight states that have legalized marijuana. Irwin believes setting taxes too high will encourage the black market to thrive.

Similarly with the various regulations on new businesses, Irwin said the goal is to create a system that doesn’t have too many barriers to entry.

Irwin is anticipating opposition from “prohibitionists” coming into the state and “spending a lot of money” to convince people to vote “no.” He said the pharmaceutical industry also has opposed pot legalization in other states, and could do so here. That’s in addition to youth- and neighborhood-based opposition groups that have already formed, as well as municipalities, including Ottawa County, that have drafted resolutions against the effort.

Business groups undecided

Officials with the Grand Rapids-area and statewide chambers of commerce say they are still studying the initiative language before taking a position. One particular concern comes in the question of whether employers will be able to maintain drug-free workplace policies if voters pass the initiative.

“At this point, we have begun to evaluate the content of the Coalition to Regulate Marijuana Like Alcohol proposal, but we have not yet taken a formal position,” Jim Holcomb, senior vice president and general counsel for the Michigan Chamber of Commerce, said in an email to MiBiz. “As you know, employers have a legal responsibility under various state and federal laws to protect all employees and for that reason we will be analyzing the language in the proposal to determine the impact it would have on the ability of employers to maintain safe and drug-free workplaces.”

Andy Johnston, vice president of government and corporate affairs for the Grand Rapids Area Chamber of Commerce, said the workplace drug policy will be one aspect the group weighs when it considers a formal position later this summer or fall.

The initiative language is drafted to allow employers to maintain a drug-free workplace, if they choose.

“This act does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marihuana,” according to the language. It also “does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person’s violation of a workplace drug policy or because that person was working while under the influence of marihuana.”

Jeff Hank of MILegalize recognized the question is going to be an issue within the business community, which is why the coalition chose to draft the language in that way.

“If we start trying to protect cannabis usage, are we amending other (state) law? You start getting into other legal challenges,” Hank said. “But what do you do when marijuana is legal, your employer tests you and you get fired for it? We’ve got to have that conversation, but we can’t solve it with this initiative.”